The Apple Watch Is A Luxury Item, And That's How Apple Will Make It A Success

The Apple Watch will come
in several variations. And it won't be cheap.Business Insider

A $349 gadget that needs your $649 other gadget to work. It looks
good. It comes in so many variations — including one with a body
made out of 18-karat gold — that few people will own the same
version.

That's the new Apple Watch, which is starting to sound more like
a luxury item than an essential gadget. And I suspect that's
exactly how the device will be seen at first when it launches
early next year.

First, there's the price. It starts at $349, but that's for the
base model. The Apple Watch will likely cost a lot more if you
choose extras like leather bands and premium case materials. I
can't imagine the solid gold version costing less than $1,000. I
wouldn't be surprised if it even went for $5,000. To put that in
perspective, other smartwatches from Samsung, LG, and Motorola
don't cost more than $250. (However,
those watches aren't very good.)

Then there's the functionality. Apple isn't finished with the
Watch, so we only got a limited demonstration of what it can do.
But most of what I saw yesterday largely mimicked the iPhone's
features: mapping, chatting, notifications from apps like
Facebook, and so on. The Apple Watch today serves as a mini
version of the iPhone already in your pocket. That'll give many
people very little reason to shell out $349 or more for something
that does essentially the same stuff as the iPhone.

(The exception, of course, will be the
fitness-tracking features like the heart rate and exercise
monitors. The iPhone can't do that. And as app developers get
more time to create stuff for the Apple Watch, I imagine it'll
become a lot more useful.)

Finally, there was something
different about the way Apple showed the watch off for the first
time. In the demo area following Tuesday's announcement, I was
flanked by will.i.am and Gwen Stefani. Angela Ahrendts, the
former Burberry CEO and new Apple VP in charge of retail, wasn't
far away. I saw Paul Deneve, former CEO of French fashion house
YSL and now a VP in charge of special projects at Apple, chatting
with VIP guests. And those are just two recent executive hires by
CEO Tim Cook that show
Apple is pivoting into a luxury brand.

The demo area was inside a temporary air conditioned
building with plush carpet and rows of Apple Watches on spinning
pedestals, as if they were pieces of
art. In short, it
didn't feel like one of the dozens of other gadget shows I've
been to. It felt like a fashion event, complete with a carefully
controlled line of people scrambling to get in.

There
were crowds waiting to get into the swanky Apple Watch demo
area.Business
Insider

None of this is to say the
Apple Watch will be a dud. Far from it. In fact, I think the best
way to get people psyched about such a pricey accessory is to
wrap an aura of high fashion and exclusivity around it.

Will the Apple Watch be a massive hit on the scale of the iPhone?
No way. The iPad wasn't, either, but it was and still is wildly
successful. (And
there's more coming.) The iPhone was a once-in-a-generation
smash hit, one that Apple continues to feed off of by building
offshoot products and services.